Bombardier's CSeries commercial aircraft landed safely after taking its maiden flight Monday morning, in a much-anticipated test run for a program that's expected to generate billions of dollars for the company.
The gleaming white CS100 plane landed after flying past spectators at Mirabel airport north of Montreal.
Senior company executives gave each other big hugs after the aircraft successfully took off shortly before 10 a.m., nearly a decade after it was first introduced and following several delays that held up the launch for almost nine months.
The first 110- to 125-seat CS100 is slated to enter into service in about a year, barring more delays.
The heavily anticipated first flight had been delayed three times over nearly nine months.
The plane is made of composite materials and its Pratt & Whitney engine promises to be quieter and help deliver fuel cost savings for customers.
The larger CS300, with up to 160 seats, is slated to be delivered by the end of 2014, after undergoing its own test flights.
Bombardier has received commitments for 388 aircraft, including 177 firm orders.
The company has said it expects to secure at least 300 firm orders from 20 customers by the time the first CSeries is delivered.
The world's third-largest aircraft manufacturer has a lot riding on the 110- to 160-seat plane, says Karl Moore of McGill University's Desautels Faculty of Management.
"It's very critical for (Bombardier) aerospace...on the plane side this is a central part of their plans going forward,'' he said in an interview ahead of the inaugural flight near where the planes will be assembled with parts from Belfast and China.
The US$3.5 billion program is expected to generate US$5 billion to US$8 billion in additional annual revenues and help to raise the company's share price.
Moore described the first flight as largely symbolic given the years of computer and on-ground testing the plane has undergone, but it's also the start of a year of flight testing.
"At one level it's a non-event because it's going to work for sure. But I think it's the symbolism of it and it allows them to go through that phase, get the data they need to go into production,'' he said.
Flight tests will try to confirm promised operating and fuel savings that are key to the aircraft's long-term success. Bombardier expects the partially composite aircraft will be 15 per cent less expensive to operate and burn 20 per cent less fuel than a similar sized plane currently in service. The savings are partially attributable to it Pratt & Whitney engines. Bombardier has a little head-start on its rivals, but the savings are less pronounced than compared to the their planned re-engined aircraft.
Walter Spracklin of RBC Capital Markets said he expects orders will ramp up in the first half of 2014 after flight data compiled over about three months confirms promised savings. The greatest potential for new business will come once the plane is in service, he added.
"Engine testing to date has been coming in better than expected and we see limited risk that the CSeries will not live up to performance claims,'' he wrote in a report, adding that company officials have confirmed that order inquiries are starting to pick up.
He sees Air Canada, a Chinese airline, Flydubai and Swiss Air as the top candidates to place orders. Spracklin said the CSeries is under serious consideration for at least 30 to 50 aircraft as part of Air Canada's search for up to 100 new narrow-body planes to replace its Embraer single-aisle aircraft.
Fadi Chamoun of BMO Capital Markets expects the CSeries will capture 30 per cent market share or about 2,100 deliveries over 20 years. Since its launch in July 2008, the CSeries has captured about 23 per cent of the 770 aircraft orders in this seat range.
"We believe that it will be challenging for the CSeries program to generate a 'home-run'-type return on capital for Bombardier given stiff competition and the sizable up-front investment,'' he wrote.
Embraer's new E2 family of jets, particularly the E195 will be a challenger to the CSeries, Chamoun added.
Airlines are reluctant to add a new aircraft type in their fleet, but the CSeries would become more attractive as it approaches entry-into-service and validates the industry-leading per seat costs, he noted. Bombardier has also been reluctant to sell many early planes at large discounts, arguing it only needs to produce 10 per month to generate a reasonable return on investment.